Dr Supachai Panitchpakdi - former Director-General of the WTO

The Trans-Pacific Partnership is a step backwards to the days before the World Trade Organisation when the US and Europe controlled the global trading system to the detriment of developing economies, says a former director-general of the WTO, Supachai Panitchpakdi of Thailand.

In New Zealand for a meeting of the honorary advisers to the Asia-New Zealand Foundation, Supachai told BusinessDesk in an interview that Asian economies had more to gain by pursuing the Regional Comprehensive Economic Partnership (RCEP), which includes China and India but not the US, than TPP, which he described as a "US-centric" trade deal.

New Zealand is one of three countries that initiated the TPP concept and has committed substantial resources to its negotiation, but it only gained momentum once the US became a member of the 12-country grouping seeking a new set of trade rules for an Asia-Pacific trade bloc. The US and Europe are also negotiating a TPP-style deal, known as TTIP (Trans-Atlantic Trade and Investment Partnership).

"TTIP and TTP together could drive the world back into the old days before the WTO was conceived, a world trading system predominated by major trading nations, which was something I thought we tried to adjust with the more democratic participation of membership of the WTO," said Supachai, who was director-general of the WTO from 2002 to 2005, immediately after former New Zealand prime minister Mike Moore.

New Zealand belongs to both TPP and RCEP, which was initiated in 2012, and is part of the four year-old Association of South-East Asian Nations Free Trade Area (AFTA), most of whose members are involved in both TTP and RCEP.

"For me, the priority should be for Asia to move in the direction of RCEP," said Supachai. "If there should be a need for the US to join in or others, it should be in the context of RCEP."

As secretary-general of the United Nations Conference on Trade and Development (UNCTAD) between 2005 and 2013, Supachai also oversaw analysis of the North American Free Trade Agreement, which found that Mexico had done poorly from the deal while the developed economies in NAFTA - the US and Canada - had benefited.

"At UNCTAD, we pointed out that for a developing country that joins a regional agreement with major, much more advanced economies, they are not easily going to gain much."

That risk existed with TPP, which would be "mainly driven by the major players of the world trade system to set up very forward-looking, very avant garde" rules in areas that less developed economies would struggle to accommodate. These included intellectual property restrictions that could thwart the availability of affordable universal healthcare and rules requiring privatisation of state-owned enterprises with certain timeframes.

TPP negotiations have stalled for more than a year on such sticking points.

"TPP is US-centric," said Supachai. "It leaves the question as to what would the rest of the membership of the TPP be able to contribute fairly to the outcome? My general basic principle on the two so-called mega-deals (TPP and TTIP) is that we have to be a bit cautious about the way we are practicing regionalism these days. I'm open-minded, but regionalism should ultimately prove to strengthen the multi-lateral processes."

Regional trade deals have become increasingly commonly pursued as the global process overseen by the WTO has failed over the last 13 years of the so-called "Doha Round" negotiations to produce a new global trade agreement.

The RCEP initiative was better suited to bolstering Asian economies' growing role in the world economy, said Supachai.

"RCEP is more ASEAN-centric and, for better or worse, ASEAN has a good record of expanding trade. Intra-ASEAN trade is now 53 to 54 per cent," he said. "This is only lower than Europe, which is 70 to 80 per cent."

New trade agreements needed to be favourable to Asia if only because of the region's status as a "global public good."

"We are the ones now generating more than half of world growth and 67 per cent of world trade and the area has been excessively accumulating financial reserves," said Supachai. "That's why RCEP is important. TPP comes in between."

New York Mayor Bill De Blasio

Professor Joseph Stiglitz, Nobel Prize winning Economist

Professor Joseph Stiglitz has written an open letter to the TPP negotiators, asking that they resist proposals to weaken consumer rights in intellectual property. The letter identifies 12 specific "grave risks" in the IP Chapter, and calls upon negotiators to publish the investor state dispute resolution text.Professor Stiglitiz is one of the best know economists in the world, having won the Nobel prize for Economic Science in 2001, and having previously served as the chief economist for the World Bank and as the Chairman of the Council of Economic Advisors for President Clinton. A PDF of the letter is attached below. The text follows:

Dear TPP negotiators,December 6, 2013As trade negotiators, you are being asked to resolve a large number of important issues that have divided Parties in the negotiations for a Trans Pacific Partnership (TPP) agreement.The decision to make the negotiating text secret from the public (even though the details are accessible to hundred of advisors to big corporations) makes it difficult for the public to offer informed commentary. But the recent publication of the negotiating text for the intellectual property rights chapter by Wikileaks, and an earlier leak of the investor state dispute resolution proposals, as well as numerous reports in the business press, make it clear that the agreement presents grave risks on all sorts of topics.As regards the provisions on intellectual property, negotiators should resist text that would, among other things:weaken the 2001 Doha Declaration on TRIPS and Public Healthmandate extensions of patents termsmandate lower standards for granting patents on medicinesmandate granting patents on surgical procedures,mandate monopolies of 12 years on test data for biologic drugsnarrow the grounds for granting compulsory license on patents,increase damages for infringements of patents and copyrights,reduce space for exceptions as regards limits on injunctions, andnarrow copyright exceptionsrequiring life+ 70 years of copyright protection,mandate excessive enforcement measures for digital information, andotherwise restrict access to knowledge.At this point in time, we do not need a TRIPS plus trade agreement, we need a TRIPS minus agreement. The TPP proposes to freeze into a binding trade agreement many of the worst features of the worst laws in the TPP countries, making needed reforms extremely difficult if not impossible.The investor state dispute resolution mechanisms should not be shrouded in mystery to the general public, while the same provisions are routinely discussed with advisors to big corporations.Sincerely,

Rep. Alcee Hastings (D-Fla.) - a converted globalist

In a poignant speech before today’s vote (12th June 2015) , Rep. Alcee Hastings (D-Fla.) warned against trusting such promises. In 1993, Rep. Hastings cast a controversial vote for the North American Free Trade Agreement (NAFTA) – the deal that spawned the status quo trade model that (The TPP) would expand. Today, Hastings stated:

In the 20 plus years that I’ve served in this body, I can think of only three votes which I deeply regret making and one of those was in support of NAFTA. In the years since, I’ve seen, after NAFTA, a decrease in American jobs, a rollback of critical environmental protections, here and in Mexico where I was promised that the environmental circumstances in the maquiladoras would be cleared up – and they were not – and a stagnation of wages that has prevented the financial upward mobility of working class and middle class Americans and has ground poor Americans into poverty beyond belief.

Rep. Hastings made clear that he has learned from NAFTA’s broken promises and urged his colleagues to stand firm by continuing to oppose Fast Track’s expansion of the trade status quo:

If we’re going to create trade policy that is worthy of future generations, then we must ensure that policy strengthens—not weakens—labor rights. It must strengthen—not weaken—environmental protections. It must ensure other countries responsibility to adhere to basic human rights. It must expand and strengthen our middle class, not squeeze hardworking Americans in favor of corporate interests. The legislation included in this rule today is part of a trade package that does nothing to bolster these important priorities.